Palestinians falling deeper into poverty, UN blames Israel

A Palestinian woman walks near an incomplete UN housing project in Rafah, Gaza Strip. Construction in Gaza has ground to a halt due to the Israeli blockade, preventing much needed construction materials from entering and creating widespread poverty and unemployment. Palestine faces economic calamity, according to a new report from a UN agency.

The blockade of Gaza and financial sanctions on the Occupied Territories have plunged Palestine into an economic black hole, and a bleak report Tuesday by the UNCTAD (the Trade and Development arm of the United Nations) laid blame on Israeli policies, Reuters reported.

Continued decreases in foreign aid over the last two years has also contributed to Palestine's woes, but much of the foreign assistance that used to flow to the territories from the US and Europe has been cut in a show of support for Israeli action.

Palestinians remain in the throes of a deep unemployment crisis, and according to the Washington Post, nearly 50 percent of young people are unemployed in Gaza, a situation that resulted in the self-immolation and death of a teenager earlier this week. Many Palestinians are restricted from entering Israel where there are jobs in manufacturing and agriculture, two industries that once flourished in Palestine, and according to the UNCTAD report, 26 percent of the general population is unemployed.

After the Second Intifada, GDP grew in Palestine, mostly through reconstruction, but that has since continually decreased. Reuters reports, "Poor planning and continued, rigid Israeli controls have caused boom time Palestinian growth rates of 9 percent in 2010 to fall by half."

Mahmoud Elkhafif, Coordinator of Palestine Assistance for UNCTAD in April accused Israel of "forced erosion of the Palestinian production base," which was mostly made up of the manufacturing and agricultural sectors. Israel's policies led to more Palestinian dependence on Israel's economy instead of their own, and forced a deeper reliance on foreign aid.

Much of Palestine's economy had been dependent on aid money for years, but after a blockade of Gaza in response to an electoral victory for Hamas in 2007 and international isolation, foreign money began slowing. In 2010, when peace talks went sour over Israel's reluctance to freeze settlement building in the West Bank, an increase of aid money from a hopeful international community that talks might foster results again slugged as countries rooting for peace became pessimistic, according to Reuters.